Case: 23-60167 Document: 80 Page: 1 Date Filed: 05/31/2023
`
`
`
`No. 23-60167
`
`IN THE
`United States Court of Appeals
`FOR THE FIFTH CIRCUIT
`
`
`ILLUMINA, INC. AND GRAIL, INC.,
`
`v.
`
`FEDERAL TRADE COMMISSION,
`
`
`
`PETITION FOR REVIEW OF
`AN ORDER OF THE FEDERAL TRADE COMMISSION
`
`Petitioners,
`
`Respondent.
`
`PETITIONERS’ OPPOSITION TO RESPONDENTS’ CROSS-MOTION
`FOR EXTENSION OF TIME AND REPLY REGARDING MOTION TO
`EXCEED WORD LIMITS
`
`SUBMITTED BY:
`
`
`
`David R. Marriott
`Christine A. Varney
`Sharonmoyee Goswami
`Michael J. Zaken
`Jesse M. Weiss
`CRAVATH, SWAINE & MOORE LLP
`825 Eighth Avenue
`Worldwide Plaza
`New York, NY 10019
`Telephone: (212) 474-1000
`
`May 31, 2023
`
`
`
`
`Gregory G. Garre
`Michael G. Egge
`Marguerite M. Sullivan
`Anna M. Rathbun
`David L. Johnson
`LATHAM & WATKINS LLP
`555 Eleventh Street NW
`Suite 1000
`Washington, D.C. 20004
`Telephone: (202) 637-2200
`
`Alfred C. Pfeiffer
`LATHAM & WATKINS LLP
`505 Montgomery Street
`Suite 2000
`San Francisco, CA 94111-6538
`Telephone: (415) 391-0600
`
`
`
`
`
`No. 23-60167
`
`IN THE
`United States Court of Appeals
`FOR THE FIFTH CIRCUIT
`
`
`ILLUMINA, INC. AND GRAIL, INC.,
`
`v.
`
`FEDERAL TRADE COMMISSION,
`
`
`
`PETITION FOR REVIEW OF
`AN ORDER OF THE FEDERAL TRADE COMMISSION
`
`Petitioners,
`
`Respondent.
`
`PETITIONERS’ OPPOSITION TO RESPONDENTS’ CROSS-MOTION
`FOR EXTENSION OF TIME AND REPLY REGARDING MOTION TO
`EXCEED WORD LIMITS
`
`SUBMITTED BY:
`
`
`
`David R. Marriott
`Christine A. Varney
`Sharonmoyee Goswami
`Michael J. Zaken
`Jesse M. Weiss
`CRAVATH, SWAINE & MOORE LLP
`825 Eighth Avenue
`Worldwide Plaza
`New York, NY 10019
`Telephone: (212) 474-1000
`
`May 31, 2023
`
`
`
`
`Gregory G. Garre
`Michael G. Egge
`Marguerite M. Sullivan
`Anna M. Rathbun
`David L. Johnson
`LATHAM & WATKINS LLP
`555 Eleventh Street NW
`Suite 1000
`Washington, D.C. 20004
`Telephone: (202) 637-2200
`
`Alfred C. Pfeiffer
`LATHAM & WATKINS LLP
`505 Montgomery Street
`Suite 2000
`San Francisco, CA 94111-6538
`Telephone: (415) 391-0600
`
`
`
`Case: 23-60167 Document: 80 Page: 2 Date Filed: 05/31/2023
`
`
`
`CERTIFICATE OF INTERESTED PERSONS
`
`No. 23-60167 Illumina, Inc. v. Federal Trade Commission
`
`The undersigned counsel of record certifies that the following listed persons
`
`and entities as described in the fourth sentence of 5th CIR. Rule 28.2.1 have an
`
`interest in the outcome of this case. These representations are made in order that the
`
`judges of this Court may evaluate possible disqualification or recusal.
`
`Counsel for Appellees:
`Matthew M. Hoffman
`FEDERAL TRADE COMMISSION
`600 Pennsylvania Ave., NW,
`Washington, D.C. 20580
`(202) 326-3097
`mhoffman@ftc.gov
`
`
`Counsel for Petitioners:
`David R. Marriott
`Christine A. Varney
`Sharonmoyee Goswami
`Michael J. Zaken
`Jesse M. Weiss
`CRAVATH, SWAINE & MOORE LLP
`825 Eighth Avenue
`Worldwide Plaza
`New York, NY 10019
`Telephone: (212) 474-1000
`Facsimile: (212) 474-3700
`
`
`Respondent:
`Federal Trade Commission
`
`
`Petitioners:
`Illumina, Inc.
`
`
`
`
`
`
`
`
`Case: 23-60167 Document: 80 Page: 3 Date Filed: 05/31/2023
`
`Gregory G. Garre
`Michael G. Egge
`Marguerite M. Sullivan
`Anna M. Rathbun
`David L. Johnson
`LATHAM & WATKINS LLP
`555 Eleventh Street NW
`Suite 1000
`Washington, D.C. 20004
`Telephone: (202) 637-2200
`
`Alfred C. Pfeiffer
`LATHAM & WATKINS LLP
`505 Montgomery Street
`Suite 2000
`San Francisco, CA 94111-6538
`Telephone: (415) 391-0600
`
`
`
`
`
`
`GRAIL, LLC
`
`Other Interested Parties:
`Illumina, Inc. has outstanding securities
`in the hands of the public, but no parent
`companies, subsidiaries, affiliates, or
`companies own at least 10% of
`Illumina, Inc.’s stock, which have any
`outstanding securities in the hands of
`the public.
`
`
`
`
`ii
`
`
`
`Case: 23-60167 Document: 80 Page: 4 Date Filed: 05/31/2023
`
`
`
`
`
`
`
`/s/ David R. Marriott
`David R. Marriott
`Christine A. Varney
`Sharonmoyee Goswami
`Michael J. Zaken
`Jesse M. Weiss
`CRAVATH, SWAINE & MOORE LLP
`825 Eighth Avenue
`New York, NY 10019
`212-474-1000
`Attorneys for Petitioner, Illumina, Inc.
`
`/s/ David L. Johnson
`Gregory G. Garre
`Michael G. Egge
`Marguerite M. Sullivan
`Anna M. Rathbun
`David L. Johnson
`LATHAM & WATKINS LLP
`555 Eleventh Street NW
`Suite 1000
`Washington, D.C. 20004
`(202) 637-2200
`
`Alfred C. Pfeiffer
`LATHAM & WATKINS LLP
`505 Montgomery Street
`Suite 2000
`San Francisco, CA 94111-6538
`(415) 391-0600
`Attorneys for Petitioner, GRAIL, LLC
`
`
`
`iii
`
`
`
`Case: 23-60167 Document: 80 Page: 5 Date Filed: 05/31/2023
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`
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`Petitioners Illumina, Inc. (“Illumina”) and GRAIL, Inc. (now known as
`
`GRAIL, LLC) (“Grail”, and with Illumina, “Petitioners”) respectfully submit this
`
`memorandum in further support of their request to exceed the word-volume
`
`limitation and in opposition to the FTC’s motion to remove this appeal from the
`
`expedited calendar.
`
`PRELIMINARY STATEMENT
`
`Although it editorializes on the request, the FTC does not oppose
`
`Petitioners’ motion for additional words. Nor could it really, because Petitioners
`
`propose to submit a single, joint brief with far fewer combined words than they
`
`could use if they filed individually. Thus, Petitioners’ request for additional words
`
`for all parties should be granted.
`
`The FTC seeks to remove this case from the expedited calendar (and obtain
`
`an additional 30 days for its response brief) on the theory that there is no longer
`
`any need for expedition because the FTC has stayed implementation of its order.
`
`That’s incorrect. Expediting this appeal will put Illumina and Grail in a position to
`
`accelerate their revolutionary cancer screening test and save lives. It will also
`
`achieve other consumer-oriented efficiencies and minimize the harm resulting from
`
`the constitutional violations on which the Commission’s Decision is based, while
`
`harming no one.
`
`
`
`
`
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`Case: 23-60167 Document: 80 Page: 6 Date Filed: 05/31/2023
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`
`
`None of the FTC’s arguments for revisiting the schedule set by the Court
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`(after motion practice and over the FTC’s objection) justifies slowing down review
`
`of the FTC’s unprecedented and unconstitutional order. The FTC’s claim that its
`
`stay order obviates the need for expedition is untimely and unfounded. The FTC
`
`entered the stay order five weeks ago, and if it represented a basis for slowing this
`
`case down, the FTC could have raised the point long ago, before Petitioners
`
`expended extraordinary effort to comply with the current schedule. While the
`
`FTC’s stay order minimizes immediate burdens on Illumina, it does not in any way
`
`eliminate (or even address) the primary reasons for expedited treatment.
`
`Petitioners’ request for additional words is no reason to alter the briefing
`
`schedule at the last minute, just as Petitioners are about to submit their opening
`
`brief on June 5. If anything, Petitioners’ request to file a single, joint brief of
`
`16,000 words reduces, rather than adds to, the FTC’s burden. The FTC does not
`
`dispute that Petitioners are entitled to file two separate briefs of 13,000 words each,
`
`which would require far more of the FTC’s resources than Petitioners’ proposal to
`
`file a single, joint brief of 16,000 words. The FTC does not claim that any of the
`
`issues presented for appeal come as a surprise to it. All were raised before the ALJ
`
`and the Commission, and the FTC has been briefing the issues to be presented in
`
`this appeal for more than 18 months.
`
`2
`
`
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`Case: 23-60167 Document: 80 Page: 7 Date Filed: 05/31/2023
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`
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`While the FTC did not raise their exact fallback positions with Petitioners in
`
`any detail before filing their cross motion, Petitioners do not have any objection to
`
`the Court affording the FTC a modest extension of its the deadline to submit a
`
`responsive brief—say 14 days—so long as the extension would not require the
`
`Court to change the August 9 argument date and would afford the Court adequate
`
`time to review the parties’ briefs before argument.
`
`ARGUMENT
`
`I.
`
`THE FTC HAS NOT OFFERED ANY REASON TO DENY
`PETITIONERS’ WORD-LIMIT REQUEST
`
`While the FTC suggests that Petitioners should not address all of the
`
`Commission’s errors, the FTC does not oppose Petitioners’ request for more words.
`
`Nor could it because there is plainly good cause for extending the word limit for a
`
`single, joint brief: (1) this is a novel antitrust case that raises issues of considerable
`
`importance; (2) the case presents significant constitutional issues; (3) the
`
`administrative record is voluminous; (4) Petitioners’ request is narrow and targeted;
`
`and (5) the FTC will not suffer any prejudice from the requested extension of the
`
`word limit. In fact, granting Petitioners’ motion benefits the FTC, because
`
`Petitioners seek leave to file a single, joint brief of 16,000 words, rather than two
`
`separate briefs of 26,000 words combined. Petitioners’ request should therefore be
`
`granted.
`
`3
`
`
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`Case: 23-60167 Document: 80 Page: 8 Date Filed: 05/31/2023
`
`
`
`II. THE FTC’S REQUEST TO REMOVE THIS CASE FROM THE
`EXPEDITED CALENDAR AND OBTAIN A 30-DAY EXTENSION
`SHOULD BE DENIED
`
`The FTC’s request to remove this case from the expedited calendar is
`
`inconsistent with the expedited schedule entered by this Court and would be
`
`prejudicial to Petitioners. Accordingly, it should be denied.
`
`A. The Case Should be Expedited for Reasons Unrelated to the
`Commission’s Stay of its Order.
`
`The FTC contends the basis for expediting this appeal evaporated with the
`
`FTC’s entry of an order staying implementation of the decision subject to this
`
`petition. That’s wrong. As Petitioners explained to the Court in support of their
`
`motion to expedite—which the Court granted over the FTC’s objection—there are
`
`no fewer than three reasons to expedite this appeal that are unaffected by the
`
`Commission’s stay.
`
`First, expediting this appeal will put Illumina and Grail in a position to save
`
`lives. Expediting the appeal will allow this Court to review the Commission’s
`
`Decision promptly so that, if this Court rules for Petitioners and the European
`
`Court of Justice rules in Illumina’s favor in the jurisdictional appeal, the benefits of
`
`the Transaction can be realized at the earliest possible time. The decision from the
`
`European Court of Justice is expected by early 2024, but could come sooner.
`
`Chief among the benefits of the Transaction is the fact that it will accelerate the
`
`adoption of a cancer screening test that will save lives. As soon as the companies
`
`4
`
`
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`Case: 23-60167 Document: 80 Page: 9 Date Filed: 05/31/2023
`
`
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`are able to integrate, Illumina will be able to bring to Grail unparalleled expertise
`
`in obtaining regulatory approvals, insurance reimbursement and operational
`
`capabilities that will help Grail bring its life-saving test to many more patients than
`
`it can on its own, sooner and at lower costs.
`
`Second, expediting this appeal will minimize the economic loss to
`
`Petitioners, consumers and the marketplace. The sooner the Court is able to
`
`resolve this appeal, the less the economic loss. Among other things, the
`
`Transaction will result in elimination of double marginalization or EDM, a well-
`
`documented efficiency from a vertical transaction that occurs when an upstream
`
`firm acquires a downstream firm to which it supplies inputs. The resulting
`
`consumer surplus over an eight-year period has been estimated at more than $600
`
`million.
`
`Third, expediting this appeal will minimize the harm resulting from the
`
`constitutional violations on which the Commission’s Decision is based. The
`
`Commission’s Decision violates multiple provisions of the U.S. Constitution,
`
`including Articles I and II, and the Due Process and Equal Protection clauses. It is
`
`well settled that violations of constitutional rights constitute irreparable harm. See
`
`Elrod v. Burns, 427 U.S. 347, 373 (1976); Deerfield Med. Ctr. v. City of Deerfield
`
`Beach, 661 F.2d 328, 338 (5th Cir. 1981). The harm that the Commission’s
`
`Decision imposes on Petitioners is realized each day that passes without relief. See
`
`5
`
`
`
`Case: 23-60167 Document: 80 Page: 10 Date Filed: 05/31/2023
`
`
`
`Opulent Life Church v. City of Holly Springs, Miss., 697 F.3d 279, 288 (5th Cir.
`
`2012).
`
`B. Adhering to the Schedule Set by the Court and Followed by
`Petitioners and Potential Amici Is Fair to All.
`
`In addition to claiming (incorrectly) that its stay order obviates the need to
`
`expedite briefing, the FTC argues that requiring it to live by the scheduling order
`
`set by the Court five weeks ago would be unduly prejudicial to the FTC. That is
`
`incorrect. In fact, relieving the FTC of the obligation to follow the Court’s
`
`schedule when Petitioners and potential amici supporting them have done so would
`
`be prejudicial to Petitioners.
`
`While this is a complex case and raises important issues, the parties have
`
`been dealing with these issues for more than two years. The FTC is fully aware of
`
`the issues and has briefed them extensively in this case and others. It does not
`
`require of the FTC any more time than Petitioners to present the issues to this
`
`Court, especially when the office managing the appeal and the individuals
`
`purportedly needing to review the FTC’s submission were involved in preparing
`
`the Decision under review. Nothing about this appeal is a mystery to any of the
`
`involved individuals at the FTC.
`
`The Court set the briefing schedule more than five weeks ago and Petitioners
`
`and any amici who may seek to support them have lived by the expedited schedule.
`
`If the FTC believed the schedule would be prejudicial to it, then it could have
`
`6
`
`
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`Case: 23-60167 Document: 80 Page: 11 Date Filed: 05/31/2023
`
`
`
`sought reconsideration of the Court’s scheduling order. In addition, if the
`
`Commission’s stay of the cease-and-desist order obviated any need for expedition,
`
`the FTC provides no explanation for why it did not seek a change to the expedited
`
`schedule as soon as the Commission issued its stay over five weeks ago. The
`
`parties litigated the schedule, the Court considered the FTC’s view, and the present
`
`schedule was adopted without any request for reconsideration from the FTC until
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`Petitioners had complied with the schedule. Waiting until the eleventh hour to
`
`seek a modification to the schedule is prejudicial to Petitioners.
`
`The FTC attempts to diminish the prejudice to Petitioners by arguing that
`
`Petitioners have had 61 days since filing its petition for review to file its opening
`
`brief. That is not the relevant point of comparison. Under a non-expedited
`
`schedule, Petitioners would have had an additional two weeks to file their brief, on
`
`June 19.1 By seeking an additional 30 days, the FTC is asking for 21 more days to
`
`respond than it would have under the default rules,2 while leaving Petitioners with
`
`two fewer weeks to file its brief than it would have under the default rules. Such a
`
`proposal is prejudicial to Petitioners.
`
`
`1 40 days after the administrative record was filed. Fed. R. App. P. 31(a)(1).
`
`2 The FTC seeks an additional 30 days on top of the 21 its already receiving.
`Having 51 days total to respond would provide the FTC 21 more days to respond
`than it would have under the rules. Fed. R. App. P. 31(a)(1).
`
`7
`
`
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`Case: 23-60167 Document: 80 Page: 12 Date Filed: 05/31/2023
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`
`
`III. PETITIONERS DO NOT OPPOSE A MODEST EXTENSION OF
`THE BRIEFING SCHEDULE
`
`The FTC argues in the alternative for a 21-day extension, or in the
`
`alternative to that, for a 14-day extension. (Opp. at 9-10.) Neither of these precise
`
`alternatives was raised with Petitioners in advance of the FTC’s cross motion, but
`
`Petitioners do not oppose a modest extension—preferably 14 days—so long as the
`
`revised schedule would not preclude an August 9 date for oral argument and would
`
`leave the Court with adequate time to review briefing in advance of oral argument.
`
`Dated: May 31, 2023
`
`
`
`
`
`Respectfully submitted,
`
`
`/s/ David R. Marriott
`David R. Marriott
`Christine A. Varney
`Sharonmoyee Goswami
`Michael J. Zaken
`Jesse M. Weiss
`CRAVATH, SWAINE & MOORE LLP
`Worldwide Plaza
`825 Eighth Avenue
`New York, NY 10019
`Telephone: (212) 474-1000
`
`Counsel for Petitioner Illumina, Inc.
`
`
`
`8
`
`
`
`Case: 23-60167 Document: 80 Page: 13 Date Filed: 05/31/2023
`
`
`
`/s/ David L. Johnson
`Gregory G. Garre
`Michael G. Egge
`Marguerite M. Sullivan
`Anna M. Rathbun
`David L. Johnson
`LATHAM & WATKINS LLP
`555 Eleventh Street NW
`Suite 1000
`Washington, D.C. 20004
`Telephone: (202) 637-2200
`
`Alfred C. Pfeiffer
`LATHAM & WATKINS LLP
`505 Montgomery Street
`Suite 2000
`San Francisco, CA 94111-6538
`Telephone: (415) 391-0600
`
`Counsel for Petitioner GRAIL, LLC
`
`
`
`
`
`
`
`9
`
`
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`Case: 23-60167 Document: 80 Page: 14 Date Filed: 05/31/2023
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`
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`CERTIFICATE OF SERVICE
`
`This is to certify that the foregoing instrument has been served via the Court’s
`
`ECF filing system in compliance with Rule 25(b) and (c) of the Federal Rules of
`
`Appellate Procedure, on May 31, 2023, on all registered counsel of record, and has
`
`been transmitted to the Clerk of the Court.
`
`/s/ David R. Marriott
`David R. Marriott
`
`
`
`Counsel for Petitioner Illumina, Inc.
`
`
`
`
`
`10
`
`
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`Case: 23-60167 Document: 80 Page: 15 Date Filed: 05/31/2023
`
`
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`CERTIFICATE OF COMPLIANCE
`
`1.
`
`This document complies with the type-volume limit of Federal Rule of
`
`Appellate Procedure 32(a)(7)(B) because, excluding the parts of the document
`
`exempted by Federal Rule of Appellate Procedure and Fifth Circuit Rule 32.1, this
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`document contains 1,742 out of the allotted 5,200 words.
`
`2.
`
`This document complies with the typeface requirements of Federal
`
`Rule of Appellate Procedure 32(a)(5), and Fifth Circuit Rule 32.1 and the type-style
`
`requirements of Federal Rule of Appellate Procedure 32(a)(6) because:
`
`this document has been prepared in a proportionally spaced typeface using
`Microsoft 365 MSO (Version 2208) with Times New Roman font, regular
`typeface and font size 14.
`
`/s/ David R. Marriott
`David R. Marriott
`
`
`
`Counsel for Petitioner Illumina, Inc.
`
`11
`
`
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